MBSL Midcap Index reaches record-breaking milestone of 5,000 points

The MBSL Midcap Index reached a record-breaking milestone of 5,000 points on Tuesday. The MBSL Index was the first to cross 1,000 points in September 1999 and the Milanka Price Index reached 1,000 points in December 2001.

On June 17, 2003, the MBSL Midcap Index was the first to move over double its base value, which was followed by the Milanka Price index (MPI) on June 23, 2003. Thereafter the MBSL Midcap index reached continuous heights of 3,000 on January 19, 2005 and 4,000 on March 8, 2006.

The Midcap index has increased by 500 points within a shorter time interval in the recent past and is quite steady in reaching the milestone in reasonable time periods. The index has moved from 3,500 to 4000 and from 4000 points to 4500 points within a seven-month period which indicates that the Midcap index shows significant growth and the prices of the Midcap stocks are on a continuous increase.

When measured over the first month of 2007, the correlation of the Midcap Index with the All share Price Index (ASPI) is 0.97, which means the Midcap Index is strongly related to the overall market. The relatively high correlation makes the Midcap Index sensitive to market-wide movements. Over the same period, the correlation of MPI with ASPI is 0.99 indicates high sensitivity to market wide movements.

The market risk of the Midcap Index was measured by its beta with respect to the ASPI.

The beta of Midcap with respect to the ASPI is 0.53, indicating Midcap portfolio is as half as risky as the overall market. Whereas the beta of MPI with respect to the ASPI is 1.3, which signals that the, Milanka Index, by its nature, is about 30% more risky than the overall market.